Purchase Of Shares Agreement for Malaysia

Purchase Of Shares Agreement Template for Malaysia

A comprehensive legal agreement governed by Malaysian law that documents the terms and conditions for the sale and purchase of shares in a company. The agreement details the purchase price, payment terms, warranties, representations, conditions precedent, and completion mechanics. It complies with the Malaysian Companies Act 2016 and other relevant legislation, including requirements for foreign ownership if applicable. The document includes provisions for due diligence findings, seller warranties, and specific indemnities, while addressing local regulatory requirements and corporate governance standards.

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What is a Purchase Of Shares Agreement?

The Purchase of Shares Agreement serves as the primary transaction document for share acquisitions in Malaysia, structured in compliance with the Companies Act 2016 and other relevant Malaysian legislation. This agreement is essential when transferring ownership of company shares, whether for a partial or complete acquisition. It captures all material terms of the transaction, including purchase price mechanisms, conditions precedent, warranties, and indemnities. The document must address specific Malaysian regulatory requirements, such as foreign ownership restrictions, stamp duty obligations, and necessary regulatory approvals. It's commonly used in both private and public company transactions, though additional requirements apply for public listed companies under Malaysian securities laws and the Stock Exchange regulations.

What sections should be included in a Purchase Of Shares Agreement?

1. Parties: Identification of the seller(s) and buyer(s), including full legal names and addresses

2. Background: Context of the transaction, including brief description of the company and purpose of the agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including shares being sold, purchase price, and payment terms

5. Conditions Precedent: Conditions that must be satisfied before completion can occur

6. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business requirements

7. Completion: Mechanics of completion, including timing, location, and actions required

8. Warranties: Seller's warranties regarding the shares, company, and business

9. Limitations on Liability: Limitations on seller's liability under the warranties and general claims

10. Confidentiality: Obligations regarding confidential information

11. Announcements: Requirements for public announcements about the transaction

12. Notices: Process for serving notices under the agreement

13. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and entire agreement

14. Execution: Signature blocks and execution formalities

What sections are optional to include in a Purchase Of Shares Agreement?

1. Tax Covenant: Detailed tax indemnities and procedures - used for larger transactions or where specific tax risks exist

2. Non-Competition: Restrictions on seller's competing activities - used when seller has significant market knowledge or relationships

3. Earn-out Provisions: Structure for additional payments based on future performance - used when purchase price includes contingent elements

4. Management Arrangements: Terms for ongoing management involvement - used when sellers will remain involved in business

5. Break Fee: Compensation if deal fails - used in larger transactions or where significant costs involved in preparation

6. Intellectual Property: Special provisions for IP transfer/protection - used when IP is a significant business asset

7. Employee Matters: Specific provisions regarding employees - used when employment arrangements are material to deal

8. Foreign Investment Approval: Provisions regarding foreign investment approvals - used for cross-border transactions

What schedules should be included in a Purchase Of Shares Agreement?

1. Share Details: Details of shares being transferred including share numbers, certificates, and shareholder information

2. Purchase Price Calculation: Detailed methodology for calculating final purchase price, including adjustments

3. Warranties: Full set of warranties given by the seller

4. Company Information: Key details about the company including corporate information, assets, and contracts

5. Completion Requirements: Detailed list of documents and actions required at completion

6. Intellectual Property: List of company's IP rights and registrations

7. Properties: Details of company's real estate interests

8. Material Contracts: Summary of key contracts affecting the business

9. Employee Information: Details of key employees and employment terms

10. Data Room Index: Index of documents disclosed during due diligence

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Retail

Healthcare

Energy

Telecommunications

Professional Services

Construction

Agriculture

Mining

Education

Transportation

Hospitality

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Risk Management

Corporate Secretarial

Tax

Business Development

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Corporate Lawyer

Legal Counsel

Company Secretary

Finance Director

Investment Manager

Corporate Development Manager

Mergers & Acquisitions Director

Business Development Director

Transaction Manager

Due Diligence Manager

Compliance Officer

Risk Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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